In their book, The Experience Economy, Pine and Gilmore posit that, “Businesses must orchestrate memorable events for their customers, and that memory itself becomes the product – the ‘experience’.”
Influenced by the epoch of the experience economy and reacting to constant technological disruption, customer expectations are now higher than ever. Brands that blindly focus on acquisition alone are now earmarked for failure. Long-term customer engagement plans are essential to build and maintain lasting customer relationships.
During Marketing’s breakfast seminar – partnered with Collinson – marketers revealed the latest trends to preserve customer loyalty.
Build emotional connection between customers and brands
Customer loyalty programs have evolved in the airline industry, where customer engagement has traditionally been transaction-based. If a customer took a certain number of flights, then that customer would receive a free upgrade. However, there has been a recent shift towards emotionally-driven experiential customer engagement.
“A loyalty programme doesn’t equate to a reward programme. They are actually slightly different,” Paul Smitton, CEO of Asia Miles stated at the event.
Explaining that it is a blend of skillfully applied CRM and targeted rewards schemes that merge to form a loyalty programme, Smitton said, “Loyalty programmes are about, ‘How do we understand our customers?’ How to engage with them in a holistic way, through the CRM. While a reward programme is just a mechanic, bait on the hook that makes customers want to form a relationship with you.”
“Once you acquire customers, you have to start retaining them.” said Mary English, executive vice president, APAC, Collinson. She suggested that brands have to focus on a multifaceted strategy, which will help build up lifetime customer value through loyalty, stating,“The two key objectives are enriching and improving customer experience and relationship. The outcomes of your objectives are acquisition, retention and advocacy.”
Meaningful experiences over material products
“Consumers value experience over material goods. Brands need to provide wider experiential redemption opportunities and ensure customers can drive additional value by accessing their own data.” English said.
Companies have started to go beyond product offering. Olivia Kosasih, head of customer engagement, Bluebell (Asia), said that the standard VIP parties or regular EDMs are no longer effective for engaging with its elite members, as these channels fail to make them feel they’ve received special treatment. In response, Bluebell Group launched a “just for you” engagement programme, offering exclusive tailor-made treatment for its top-tier VIP members. “For top-tier customers, we reward them with experiences that money cannot buy. For example, a trip to Milan with shopping spending, so that they can choose their own wardrobe.”
The key to retain loyal customers is to know your customers, tailor the offering you provide to them, present them with value and experiences.
Leverage technology to bring better experience
Technology has created a shift in decision making. Before purchasing, consumers perform research on Google, visit comparison sites, and read consumer reviews.
“Understanding the customer journey is more important, tech comes next,” said Alex Lau, head of innovation and strategy at the institutional banking group, DBS Bank. Lau further explained that it is crucial to understand customer pain points. Companies can then use the correct technology to address the specific issues or resolve problems for customers, providing a smoother customer journey.
Smitton said brands have to leverage data analytics and look for the patterns, relationships, and motivations behind data, to discover the implications on potential solutions and values. Using these insights brands can then better anticipate customer needs and personalise experiences.
Paid membership is the way
Companies and consumers are eager to embrace paid membership programmes that provide benefits for both sides. Christopher Evans, Joint CEO of Collinson pointed out that consumers are seeking preferential and personalised treatment. Evans stated, “Customers are happy to pay more for better service, benefits and experiences.” Moreover, a paid programme is likely to help the brand become the default destination for a customer.
In addition, brands are able to collect higher quality data through memberships, both at joining and at point of purchase when the customer subscribes. Greater data leads to deeper analytical opportunities, which in turn leads to better and more relevant communication, benefits, and rewards.
Evans said, consumers welcomed the flexibility of subscription services over ownership. It allows selective opting-in to only the goods and services they want, and opting-out if their financial situation changes. Evans gave amazon Prime as an example which has made subscription loyalty mainstream. 60% of U.S. amazon customers have Prime, with 96% being likely to renew.